The Consumer Financial Protection Bureau (“CFPB”) has issued a final rule, effective January 15, 2020, that provides the annual adjustment for inflation of the maximum amount of each civil penalty within the CFPB’s jurisdiction. The maximum amounts are subject to an annual “cost-of-living adjustment” under the Federal Civil Penalties Inflation Adjustment Act of 1990 (“Inflation Adjustment Act”), as amended by the Debt Collection Improvement Act of 1996 and further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.
The Inflation Adjustment Act mandates that adjustments be made annually to “maintain the deterrent effect of civil monetary penalties and promote compliance with the law.[1]” The annual adjustments are calculated by applying a statutory method to determine a multiplier amount. The multiplier amount is then applied to the current penalty amount and rounded to the nearest dollar. For 2020, the multiplier reflecting the “cost-of-living adjustment” is 1.01764.
The new penalty amounts that apply to civil penalties assessed after January 15, 2020 are provided below:
| Law | Penalty Description | Penalty Amounts Established Under 2019 Final Rule | New Penalty Amount |
|
Consumer Financial Protection Act, 12 U.S.C. 5565(c)(2)(A) |
Tier 1 Penalty |
$5,781 |
$5,883 |
|
Consumer Financial Protection Act, 12 U.S.C. 5565(c)(2)(B) |
Tier 2 Penalty |
28,906 |
29,416 |
|
Consumer Financial Protection Act, 12 U.S.C. 5565(c)(2)(C) |
Tier 3 Penalty |
1,156,242 |
1,176,638 |
|
Interstate Land Sales Full Disclosure Act, 15 U.S.C 1717a(a)(2) |
Per violation |
2,014 |
2,050 |
|
Interstate Land Sales Full Disclosure Act, 15 U.S.C 1717a(a)(2) |
Annual Cap |
2,013,399 |
2,048,915 |
|
Real Estate Settlement Procedure Act, 12 U.S.C. 2609(d)(1) |
Per failure |
94 |
96 |
|
Real Estate Settlement Procedure Act, 12 U.S.C. 2609(d)(1) |
Annual Cap |
189,427 |
192,768 |
|
Real Estate Settlement Procedure Act, 12 U.S.C. 2609(d)(2)(A) |
Per failure, where intentional |
190 |
193 |
|
SAFE Act, 12 U.S.C. 5113(d)(2) |
Per violation |
29,192 |
29,707 |
|
Truth in Lending Act, 15 U.S.C. 1639e(k)(1) |
First violation |
11,563 |
11,767 |
|
Truth in Lending Act, 15 U.S.C. 1639e(k)(1) |
Subsequent violations |
23,125 |
23,533 |
[1] See Inflation Adjustment Act section 2, codified at 28 U.S.C 2461 note.
